Companies purchase insurance for litigation protection in the form of an insurer's duty to defend lawsuits. Under New Jersey law, the duty to defend begins immediately upon the filing of a complaint that includes allegations that might trigger coverage.

However, a New Jersey Supreme Court opinion from Aug. 10, Norman International Inc. v. Admiral Insurance Co., relied on a narrow exception — first advanced in Burd v. Sussex Mutual Insurance Co. — to deny a defense to an insured. Finding that a clearly defined coverage issue could only be resolved from facts outside the complaint and could not be resolved in the underlying case, Norman allowed the insurer to rely on extrinsic evidence to avoid a defense obligation.

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